This Is One GAME Congress Should Play…And Pass

With Congress hurtling toward a debt ceiling increase this summer and another budget showdown in the Fall, their legislative agenda will be limited in 2017. Despite the (now normal) chaos, the Gaming Accountability and Modernization Enhancement (GAME) Act should move forward. The GAME Act puts the power of legalization and regulation of gambling in the hands of states where it belongs. With such a dysfunctional Congress and President, every opportunity to give states more autonomy should be encouraged.

Introduced as a discussion draft by Rep. Frank Pallone (D-N.J.), the GAME Act would repeal any federal prohibitions on gambling and allow each state to decide whether to allow wagers of chance within their borders. This applies to all forms of gambling, from casinos to poker, sports bets to daily fantasy, lotteries to horse racing.

“Despite the federal gaming laws in place today, Americans are betting up to $400 billion a year on sporting events alone,” Pallone said in a news release issued by House Energy and Commerce Committee Democrats. “It’s time to recognize that the laws are outdated, and the GAME Act will modernize them by increasing transparency, integrity, and consumer protections.”

In addition to moving more consumers away from the gambling black markets to which Pallone alluded, his legislation could help eliminate some of the gray area that exists in current federal law. A prime example is the interpretation of the 1961 Interstate Wire Act. The Department of Justice, under the Obama administration, ruled that legislation didn’t apply to internet wagers, freeing states to begin legalizing various forms of online gambling that include lottery ticket sales and casino and poker games. But President Trump’s attorney general, Jeff Sessions, has said Obama’s DOJ made a mistake and expressed a desire to revisit that ruling.

The GAME Act would also notably end the Professional and Amateur Sports Protection Act (PASPA) of 1992, a federal prohibition of state-authorized sports betting. That law is awaiting a possible hearing before the U.S. Supreme Court, where it could be struck down as an impediment to the Tenth Amendment that protects states from undue federal influence.

States have some common-sense responsibilities under the GAME Act. If they choose to legalize gambling they must create rules that comply with federal banking laws, help address problem gambling, restrict access to minors and other protections for consumers under the draft legislation.

The Competitive Enterprise Institute notes the bill does have a possible Achilles heel in how it defines fantasy sports as gambling, a designation that industry has resisted. In fact, the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006, which severely curtailed the booming online poker industry, specifically exempted daily fantasy sports from its clutches. (Poker should also be treated with the same non-gambling designation since better players win out in the long run, as with daily fantasy sports, but that’s a different argument.)

Designating daily fantasy sports as gambling could yield opposition to the GAME Act from professional sports leagues who formed partnerships with companies like DraftKings and FanDuel, but have an aversion to being associated with gambling, CEI said.

“If Rep. Pallone and GAME Act supporters want to give the bill its best chance of passage, they ought to strike all the language related to fantasy sports,” wrote Michelle Minton of CEI.

The possible legislation will likely have the support of the Poker Players Alliance, which has pushed state-regulated online poker since passage of the UIGEA, as well as the American Gaming Association, which has supported legalizing sports gambling across the country.

The GAME Act would allow states to tax gambling revenues that are now going overseas, as players seek foreign operators to accept the wagers they can’t make in their own country thanks to the heavy-handedness of the federal government.

States should also be able to form interstate compacts, such as how Nevada and Delaware have done with online poker, to increase player liquidity and boost the games’ chance of success.

States have long had the ability to determine among their own lawmakers and constituents whether to legalize such forms of gambling as lotteries and casinos. There’s no reason that concept shouldn’t apply to other games of chance and skill, as well.